When CEOs manifest themselves against a federal directive, their messages are usually transmitted to closed doors or in a collective open letter. But this week, Elon Musk changed it all and forced the issue in a long public discussion with Donald Trump.
The dispute has already been expensive for Musk and its various businesses, including Tesla. The automaker’s shares plummeted with the oscillation of the news, falling 14% on Thursday (5) and costing $ 150 billion to shareholders.
Read more:
Analysts now warn that the Trump dispute can cost Tesla’s billions, considering that Trump can revoke tax credits for electric vehicles and other measures that have boosted Tesla’s profits.
The company may also face increasing regulatory obstacles around its autonomous vehicles, the technology that should boost Tesla’s future and has been cited by stock market analysts as one of the reasons for impressive and sustained action of stock.
Dan Ives, an optimistic analyst at Tesla and Wedbush, seemed to talk to investors on Friday morning when he wrote in a research note: “This needs to calm down.”
Continues after advertising
Council without reaction
In an ordinary company, there is a great chance that the events of the last days will lead to a CEO. But does Tesla’s advice fire Musk to protect public shareholders from potential damage?
“They should,” Charles Elson, founding director of the Weinberg Center for Corporate Governance at the University of Delaware, to Fortune. “But they won’t do it.”
The dispute between Trump and Musk is only the latest in a series of events that have raised the question about the real role of Tesla’s board in the company.
Continues after advertising
“Over the years, Musk’s behavior has become more scandalous,” says Elson. “The lack of advice from the advice makes you wonder, ‘Who are these people? Why are they there?’”
For a long time, the advice has been criticized for being very close to Musk and therefore willing to ignore numerous management issues.
Controversy
For example, it approved of the controversial musk salary package in 2018, worth $ 56 billion, and silently witnessed a year of high-executive high-profile divisionist behavior, which led to public protests and the distance from the company’s customers. And recent allegations about the use of drugs by Musk echo reports that have emerged in the past without putting the role of Musk at risk.
Continues after advertising
There are some factors that contribute to this. Musk is a Tesla-controlling shareholder, where he owns 22% of the voting power, making it even more difficult for board members to obtain the necessary votes to force him to leave. The advice is also in a difficult position, as Musk’s resignation can sink the actions, considering that his name is closely associated with the company.
Many directors also have particularly close ties with Musk. This includes his brother Kimbal Musk, entrepreneur and restaurant owner, and Joe Gebbia, co -founder of Airbnb and friend of Musk. There are no CEOs of the auto industry or green energy in the group, as expected in a typical electric vehicle company.
